A detailed report prepared by Altus Group for the Building Industry and Land Development Association (BILD) sheds light on rising development charges in the Greater Toronto Area (GTA). According to the report released last week, development charges have increased across the GTA between 236% and 878% since 2004, straining the ability of more people to join the housing market. Altus Group's figures show that current fees add approximately $186,000 to the price of an average new single-family home in the region, and $121,000 to the cost of an average high-rise apartment.
"Some of these costs, such as development charges, are increasing far faster than the rate of inflation, squeezing prospective new home buyers out of the market," reads a statement issued by Dave Wilkes, President and CEO of BILD. "Combined, development charges and HST make up nearly 80% of all government fees applied to new homes. With affordability being a significant concern in GTA markets, these types of increases are not sustainable," added Wilkes.
Between 2009 and 2017, the average price of low‐rise homes across the GTA increased by 167%, while average high‐rise unit prices have increased by 80%. The low-rise market has been much harder hit by these rising costs. Average government charges for single-detached homes now reach roughly $186,300, accounting for 21.7% of the average price for a new home. This is just the average though, with development charges climbing as high as $232,500 per home in the Town of Oakville.
While overall government development fees are lower for new condominium apartment units, the per-apartment fee of $121,300 translates to an even higher percentage of total cost, accounting for roughly 23.6% of the average unit price. These fees range from as low as $68,800 per unit in the Town of Bradford West Gwillimbury all the way up to $159,900 per unit in the City of Markham.
You can learn more about rising development fees by checking out the report. Want to share your opinion? Let us know what you think in the comments section provided below.